As office watercooler chatter turns to rising healthcare costs, many employees wonder if their current benefits package offers everything they need. That's where voluntary benefits come in - additional options to supplement your core health insurance and retirement plans.
But what exactly are voluntary benefits and how can they protect your finances? Let's explore the voluntary benefits landscape.
Defining Voluntary Benefits
Voluntary benefits (also called supplemental benefits) are optional insurance policies paid for by the employee through payroll deduction. They provide extra security in case of unexpected life events. These policies complement, but don't replace, traditional benefits offered by an employer. Common voluntary options include:
- Accident insurance - Covers costs associated with unforeseen injuries, like emergency room visits.
- Critical illness insurance - Provides a lump sum payment if diagnosed with a major condition like cancer, stroke or heart attack.
- Hospital indemnity insurance - Offers fixed payments to cover hospital-related bills and expenses.
Unlike core medical insurance, voluntary benefits pay cash directly to you, not just the healthcare provider. You decide how best to spend the money based on your needs.
Why Consider Voluntary Benefits?
With rising out-of-pocket medical expenses, voluntary benefits provide an affordable safety net. Here are some key advantages:
- Fill coverage gaps - Many core insurance plans come with high deductibles and copays. Voluntary options can help cover unexpected costs.
- Portable coverage - If you change jobs, voluntary benefits go with you instead of terminating.
- Customizable choices - Select policies tailored to your priorities, like accident insurance for active lifestyles.
- Accessible for all - Voluntary benefits are available regardless of health history, with no medical exams required.
- Convenient payroll deduction - Premiums are paid through automatic payroll deductions, making budgeting easy.
What Voluntary Benefits Are Worth It?
With an array of options available, focus on benefits that align with your risks and budget. Consider:
- Accident insurance - Ideal for active individuals prone to injuries or families with accident-prone children.
- Critical illness - Provides financial relief after major diagnoses like cancer or stroke. Especially useful for those not yet eligible for Medicare.
- Hospital indemnity - Helps cover out-of-pocket costs of hospital stays for things like co-pays and transportation expenses.
Your employer will determine which voluntary benefits to offer. Be sure to discuss your needs with HR to ensure the selections provide meaningful value.
How Much Do Voluntary Benefits Cost?
Premiums vary based on the type of policy, benefit amounts, ages of covered dependents and other factors. However, voluntary benefits see high participation rates because they offer affordability. According to employee benefits company Unum, over 30% of employees opt into available voluntary benefits when offered. Why? Premiums often cost under $20 per month per coverage type when paid through payroll deduction.
For 60-year-old employee Fred Johnson, taking advantage of his company's voluntary insurance offerings only sets him back $16 per month for accident coverage, $27 per month for critical illness, and $12 per month for hospital indemnity - just over $50 per month total. A small price to pay for the peace of mind of extra financial protection.
Finding the Best Voluntary Benefit Plans
If your employer already offers voluntary benefits, take time to review options during open enrollment. If not, suggest they explore adding these supplemental policies. When comparing plans, look for:
- Comprehensive coverage: Avoid limited policies with low payouts or strict requirements. Seek robust plans that activate frequently.
- Added perks: Some plans offer extras like wellness benefits, EAP programs, and travel assistance services.
- Strong financial backing: Insurer financial strength and reputation matter when choosing providers. Select established names over startups.
- Positive customer service: Pay attention to reviews highlighting ease of claims and responsive support channels.
Voluntary benefits provide an affordable way to fill the gaps in core insurance. Evaluate your risks, discuss options with HR, and leverage these policies to protect your pocketbook from life's surprises.